Exhibit 10(a)
THE ▇▇▇▇▇▇ & SESSIONS CO.
FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Fifth Amendment to the Amended and Restated Credit Agreement (herein,
the "Amendment") is entered into as of July 29, 2003, among The ▇▇▇▇▇▇ &
Sessions Co., an Ohio corporation (the "Borrower"), the Guarantors party hereto,
the Lenders party hereto, and ▇▇▇▇▇▇ Trust and Savings Bank, as Administrative
Agent for the Lenders.
PRELIMINARY STATEMENTS
A. The Borrower, the Guarantors, the Lenders and the Administrative Agent
are parties to an Amended and Restated Credit Agreement dated as of December 15,
2000 (the Amended and Restated Credit Agreement, as the same has been amended
prior to the date hereof, being referred to herein as the "Credit Agreement").
All capitalized terms used herein without definition shall have the same
meanings herein as such terms have in the Credit Agreement.
B. The Borrower and the Lenders have agreed to add an Excess Cash Flow
prepayment provision, amend certain financial covenants and related definitions,
and amend certain other provisions of the Credit Agreement, in each case under
the terms and conditions set forth in this Amendment.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in
Section 2 below, the Credit Agreement shall be and hereby is amended as follows:
1.1. Clause (iv) of Section 1.10(b) of the Credit Agreement (Prepayment;
Mandatory) shall be renumbered clause (v), and a new clause (iv) shall be
inserted into Section 1.10(b) of the Credit Agreement between clause (iii) and
amended clause (v) of the Credit Agreement which shall read as follows:
(iv) On April 15th of each year, beginning April 15, 2004, the
Borrower shall prepay the Term Loans by an amount equal to 50% of Excess
Cash Flow of Borrower and its Subsidiaries for the most recently completed
fiscal year of the Borrower.
1.2. Section 5.1 of the Credit Agreement (Definitions) shall be amended by
adding the following definition of Excess Cash Flow in appropriate alphabetical
order which read as follows:
"Excess Cash Flow" means, with respect to any period, the amount (if
any) by which (a) EBITDA (but determined for such purposes without giving
effect to any extraordinary gains or losses) during such period exceeds (b)
the sum of (i) Interest Expense payable in cash during such period, plus
(ii) federal, state and local income taxes payable in cash during such
period, plus (iii) the aggregate amount of payments of the Term Loans
required to be made by the Borrower and its Subsidiaries during such period
in respect of all principal on all Indebtedness of Borrowed Money (whether
at maturity, as a result of mandatory sinking fund redemption, mandatory
prepayment, acceleration or otherwise, but excluding payments made under
the Revolving Credit and excluding mandatory prepayments of the Term Loans
required to be made in respect of Excess Cash Flow under Section 1.9(b)
hereof), plus (iv) the aggregate amount of Capital Expenditures made by the
Borrower and its Subsidiaries during such period to the extent permitted by
this Agreement and not financed with proceeds of Indebtedness for Borrowed
Money, plus (iv) cash payments made during such period with respect to the
Borrower's and its Subsidiaries' Plans and retiree medical plan expenses.
1.3. The definition of "EBITDA" appearing in Section 5.1 of the Credit
Agreement (Definitions) shall be amended and restated in its entirety to read as
follows:
"EBITDA" means, with respect to any period, Net Income for such period
plus (A) all amounts deducted in arriving at such Net Income in respect of
(a) Interest Expense, plus (b) federal, state, local, and foreign income
taxes for such period, plus (c) amounts properly charged for depreciation
of fixed assets and amortization of intangible assets during such period,
plus (d) any charges to Net Income during such period which are non-cash,
non-recurring expenses arising from the rationalization of the Borrower's
facilities, product lines or personnel, up to a maximum amount equal to 10%
of Net Worth at the end of such period, plus (e) any charges to Net Income
during such period (up to $15,000,000 in the aggregate during the term of
this Agreement, including any such charges accrued prior to the Effective
Date) associated with the Intermatic Litigation, plus (f) any non-cash
expenses incurred with respect to its Plans during such period, plus (g)
any cash expenses incurred with respect to its Plans during such period up
to a maximum amount of $500,000, plus (h) any cash or non-cash expenses
incurred with respect to its retiree medical plans
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during such period up to a maximum amount of $500,000, plus (i) for the
fiscal quarter ending September 30, 2003, one-time amendment fees up to
$328,000 in the aggregate payable hereunder, minus (B) the sum of any
recapture, recoveries, or other credits to Net Income during such period
associated with respect to (a) the Intermatic Litigation, (b) its Plans,
and (c) its retiree medical plans. In the event that any non-cash charge is
excluded from the computation of EBITDA for a given period pursuant to
clause (d) above but the circumstances giving rise to such charge have a
cash impact in a subsequent period which would have reduced EBITDA but for
the charge in the prior period, such impact shall be taken into account in
computing EBITDA in the period when such impact occurs.
1.4. Section 8.22 of the Credit Agreement (Total Funded Debt/EBITDA Ratio)
shall be amended and restated in its entirety to read as follows:
Section 8.22. Total Funded Debt/EBITDA Ratio. The Borrower shall not,
as of the last day of each fiscal quarter of the Borrower specified below,
permit the Total Funded Debt/EBITDA Ratio to be more than:
TOTAL FUNDED
DEBT/EBITDA RATIO
FISCAL QUARTER ENDING ON OR ABOUT: SHALL NOT BE MORE THAN:
June 30, 2003 3.75 to 1.0
September 30, 2003 3.75 to 1.0
December 31, 2003 3.75 to 1.0
March 31, 2004 3.75 to 1.0
June 30, 2004 3.25 to 1.0
September 30, 2004 3.25 to 1.0
December 31, 2004, and each fiscal 2.75 to 1.0
quarter ending thereafter
1.5. Section 8.23 of the Credit Agreement (Interest Coverage Ratio) shall
be amended and restated in its entirety to read as follows:
Section 8.23. Interest Coverage Ratio. The Borrower shall not, as of
the last day of each fiscal quarter of the Borrower specified below, permit
the ratio of (a) EBITDA for the four fiscal quarters of the Borrower then
ended to (b) Interest Expense for the same four fiscal quarters then ended
to be less than:
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INTEREST COVERAGE RATIO SHALL
FISCAL QUARTER ENDING ON OR ABOUT: NOT BE LESS THAN:
June 30, 2003 3.00 to 1.0
September 30, 2003 3.00 to 1.0
December 31, 2003 3.00 to 1.0
March 31, 2004 3.00 to 1.0
June 30, 2004 3.50 to 1.0
September 30, 2004 3.50 to 1.0
December 31, 2004, and each fiscal 4.00 to 1.0
quarter ending thereafter
1.6. Section 8.27 of the Credit Agreement (Minimum EBITDA) shall be amended
and restated in its entirety to read as follows:
Section 8.27. Minimum EBITDA. As of the last day of each fiscal
quarter of the Borrower specified below, the Borrower shall not permit
EBITDA for the four fiscal quarters of the Borrower then ended to be less
than:
EBITDA FOR FOUR FISCAL
QUARTERS THEN ENDED SHALL NOT
FISCAL QUARTER ENDING ON OR ABOUT: BE LESS THAN
June 30, 2003 $28,000,000
September 30, 2003 $28,000,000
December 31, 2003 $28,000,000
March 31, 2004 $28,000,000
June 30, 2004 $30,000,000
September 30, 2004 $30,000,000
December 31, 2004, and each fiscal $32,000,000
quarter ending thereafter
1.7. Sections 8.29 and 8.30 of the Credit Agreement (Operating Review;
Financial Advisor) shall each be amended and restated in their entirety to read
as follows:
Section 8.29. Intentionally deleted.
Section 8.30. Intentionally deleted.
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SECTION 2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all
of the following conditions precedent:
2.1. The Borrower, the Administrative Agent, and the Required Lenders shall
have executed and delivered this Amendment.
2.2. The Guarantors shall have executed and delivered to the Administrative
Agent their consent to this Amendment in the space provided below.
2.3. The Borrower shall have paid to the Administrative Agent for
distribution to each Lender executing and delivering this Amendment on or before
July 29, 2003, a fee equal to 0.25% of the outstanding amount of each such
Lender's Revolving Credit Commitment and Term Loan.
2.4. Legal matters incident to the execution and delivery of this Amendment
shall be satisfactory to the Administrative Agent and its counsel.
SECTION 3. REPRESENTATIONS.
In order to induce the Lenders to execute and deliver this Amendment, the
Borrower hereby represents to the Lenders that as of the date hereof, and after
giving effect to the amendments provided for in this Amendment, (a) the
representations and warranties set forth in Section 6 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 6.5 shall be deemed to refer to the most recent financial
statements of the Borrower delivered to the Lenders) and (b) the Borrower is in
compliance with the terms and conditions of the Credit Agreement and no Default
or Event of Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment.
SECTION 4. MISCELLANEOUS.
4.1. The Borrower and the Guarantors have heretofore or concurrently
herewith executed and delivered to the Lenders the Mortgages, the Security
Agreement, the Pledge Agreement, and certain other Collateral Documents. The
Borrower and, by signing below, the Guarantors, hereby acknowledge and agree
that the Liens created and provided for by the Collateral Documents continue to
secure, among other things, the Obligations arising under the Credit Agreement
as amended hereby; and the Collateral Documents and the rights and remedies of
the Lenders thereunder, the obligations of the Borrower and the Guarantors
thereunder, and the Liens created and provided for thereunder remain in full
force and effect and shall not be affected, impaired or discharged hereby.
Nothing herein contained shall in any manner affect or impair the priority of
the liens and security interests created and provided for by the Collateral
Documents as to the indebtedness which would be secured thereby prior to giving
effect to this Amendment.
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4.2. Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.
4.3. The Borrower agrees to pay on demand all reasonable costs and expenses
incurred by the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of this Amendment, including the reasonable
fees and expenses of counsel for the Administrative Agent.
4.4. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[SIGNATURE PAGE TO FOLLOW]
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This Fifth Amendment to Amended and Restated Credit Agreement is entered
into as of the date and year first above written.
"BORROWER"
THE ▇▇▇▇▇▇ & SESSIONS CO.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name ▇▇▇▇▇ ▇. ▇▇▇▇
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Title Executive VP and Chief Financial Officer
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"GUARANTORS"
▇▇▇▇▇▇ CHIMES CO.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name ▇▇▇▇▇ ▇. ▇▇▇▇
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Title Vice President, Secretary & Treasurer
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DIMANGO PRODUCTS CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name ▇▇▇▇▇ ▇. ▇▇▇▇
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Title Secretary
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PYRAMID INDUSTRIES II, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name ▇▇▇▇▇ ▇. ▇▇▇▇
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Title Vice President & Treasurer
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"LENDERS"
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, in its
individual capacity as a Lender and as
Administrative Agent
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title Managing Director
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BANK OF AMERICA, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title Senior Vice President
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NATIONAL CITY BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title Senior Vice President
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WOODSIDE CAPITAL PARTNERS II, LLC
By: Woodside Capital Management, LLC,
its duly authorized manager
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title EVP
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GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title Duly Authorized Signatory
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BANK ONE, N.A.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name ▇▇▇▇▇ ▇. ▇▇▇▇
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Title First Vice President
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THE HUNTINGTON NATIONAL BANK
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title Senior Vice President
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FIFTH THIRD BANK (NORTHEASTERN OHIO)
By /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name ▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title Vice President
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KEYBANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title Vice President
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LASALLE BANK NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title VP
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